AngloGold Ashanti Plc Q2 FY2024 earnings call

• Safety: Addressed a fatal incident in May, emphasized learning from it and ongoing efforts to improve safety culture towards zero harm.
• Financial Results: Strong operating and financial results for H1, with revenue up, EBITDA up, free cash flow positive. Production improved, cash costs reduced.
• Asset Performance: Most Tier-1 assets had solid performance; Tier-2 mines driving full potential. Brazil's turnaround, Siguiri's recovery, Obuasi's production and infrastructure progress, Sunrise Dam's weather challenges and FAP progress, Geita's underground improvements.
• Dividend: Declared dividend reflecting confidence in operating performance.
• Full Asset Potential Program: Yielding benefits, providing resilience to offset inflation and production interruptions.

Production: Up 2% year-on-year, driven by key assets. Q2 production 12% higher than Q1. Revenue: Up over $400 million year-on-year. Cash Costs: 1% lower year-on-year. EBITDA: Up 65% to $1.12 billion. Free Cash Flow: Turned from outflow of $205 million last year to inflow of $206 million. Tier-1 assets had solid performance with higher tons and grades; Tier-2 mines drove cost lower. Specific mines: Australia improved post-March events, Siguiri recovered from Q1 challenges, Brazil had a turnaround, Obuasi saw production and infrastructure progress, Sunrise Dam faced weather challenges but FAP continued, Geita had underground improvements.

• Production: Anticipate 4% growth midpoint for the year.
• Cash Costs: Flat midpoint, with full potential benefits offsetting inflation.
• Sustaining CapEx: Slightly growing to invest in reserves development.
• Growth CapEx: Increasing for Nevada project.

• Operational Risks: Volatility in mine grades (e.g., Obuasi's Block 8), weather challenges (e.g., Australia's flooding), maintenance issues (e.g., Siguiri's spare inventories).
• Geopolitical and Regulatory Risks: Impact on operations in certain jurisdictions, e.g., Guinea's regulatory environment.
• Gold Price Volatility: While gold price is strong, volatility could affect revenue and margins.

Q: On cost performance and asset potential program, where do you see further improvements?

A: Alberto mentions Sunrise Dam's second wave has $100M potential, and continuing to counter inflation with full potential initiatives.

Q: On Obuasi's production target, when will 360 be achieved?

A: Alberto says ventilation is critical; 2025 depends on ventilation shaft, aiming for 350k+ in medium to long term.

Q: On credit rating, any plans to improve?

A: Gillian says actively engaging with rating agencies, positive momentum on consistency, but no specific timing on rating change.

Q: On effective tax rate and one-offs, what's driving?

A: Gillian explains deferred tax adjustment in Brazil/Argentina and closure provision additions as one-offs.

Q: On underhand cut and fill mining at Obuasi, potential expansion?

A: Alberto says proven method used in difficult ground, anticipating use in Block 10 and lower Block 8.

Q: On working capital movement, outlook for second half?

A: Gillian says maintaining discipline, no unwind expected, positive movement in first half.

Q: On Nevada drilling, focus?

A: Unidentified rep says focus on Merlin pit area, infill drilling within outlined portion.

Q: On CDS buyer and Sierra Grande, current status?

A: Alberto says CDS talks continue, Sierra Grande is cash producing, no active selling but open to reasonable offers.

Q: On free cash flow and Brazil sustainability, inclusion of Kibali proceeds and Brazil's H2 performance?

A: Gillian says free cash flow includes Kibali proceeds, Alberto says Brazil's performance is sustainable with inertia continuing.